Caspian Services (CSSV) Inactive 10-Q20 May 152015 Q2 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
Document and Entity Information	Mar. 31, 2015	13-May-15
Document And Entity Information
Entity Registrant Name	CASPIAN SERVICES INC
Entity Central Index Key	1093430
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-21
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		52,657,574
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2015

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2015	Sep. 30, 2014
In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
Current Assets
Cash	$1,480	$1,957
Trade accounts receivable, net of allowance of $3,890 and $3,454, respectively	5,343	10,458
Trade accounts receivable from related parties, net of allowance of $431 and $440, respectively	642	0
Short-term notes from related parties	2,963	70
Other receivables, net of allowance of $715 and $730, respectively	381	558
Inventories	1,316	1,261
Property held for sale, net of allowance of $1,052 and $1,074, respectively	44	44
Prepaid taxes	58	1,228
Advances paid, net of allowance of $27 and $28, respectively	319	547
Deferred tax assets	1,032	88
Prepaid expenses and other current assets	249	329
Total Current Assets	13,827	16,540
Vessels, equipment and property, net	40,793	42,087
Drydocking costs, net	308	538
Long-term deferred tax assets	2,507	2,450
Goodwill	185	189
Intangible assets, net	58	14
Long-term prepaid taxes	2,958	2,873
Long-term other receivables, net of current portion	777	2,377
Total Assets	61,413	67,068
Current Liabilities
Accounts payable	1,880	2,319
Accounts payable to related parties	81	76
Accrued expenses	1,543	1,690
Taxes payable	311	527
Deferred revenue	29	0
Accelerated put option liability	22,641	21,649
Long-term debt - current portion	78,439	75,284
Total Current Liabilities	104,924	101,545
Deficit
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 52,657,574 shares issued and outstanding	53	53
Additional paid-in capital	64,832	64,832
Accumulated deficit	-74,879	-66,536
Accumulated other comprehensive loss	-20,267	-20,141
Deficit attributable to Caspian Services, Inc. Shareholders	-30,261	-21,792
Deficit attributable to noncontrolling interests	-13,250	-12,685
Total Deficit	-43,511	-34,477
Total Liabilities and Deficit	$61,413	$67,068

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2015	Sep. 30, 2014
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
ASSETS:
Allowance for trade accounts receivable	$3,890	$3,454
Allowance for trade accounts receivable from related parties	431	440
Allowance for other receivables	715	730
Allowance for property held for sale	1,052	1,074
Allowance for advances paid	$27	$28
EQUITY
Common stock, par value	$0.00	$0.00
Common stock, authorized shares	500,000,000	500,000,000
Common stock, issued shares	52,657,574	52,657,574
Common stock, outstanding shares	52,657,574	52,657,574

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	3 Months Ended		6 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Revenues
Vessel revenues	$1,128	$548	$5,890	$5,836
Geophysical service revenues (which includes $880 from related parties for the three and six months ended March 31, 2015, and $0 from related parties for the three and six months ended March 31, 2014)	1,094	3,155	2,096	7,268
Marine base service revenues (which includes $58 from related parties for the three and six months ended March 31, 2015, and $535 and $665 from related parties for the three and six months ended March 31, 2014, respectively)	443	859	776	1,216
Total Revenues	2,665	4,562	8,762	14,320
Operating Expenses
Vessel operating costs	1,325	1,760	3,824	4,852
Cost of geophysical service revenues	901	2,391	1,833	4,071
Cost of marine base service	190	170	361	354
Impairment loss	0	56	0	56
Depreciation and amortization	1,237	1,067	2,456	2,277
General and administrative expense	2,463	1,900	4,357	4,050
Total Costs and Operating Expenses	6,116	7,344	12,831	15,660
Loss from Operations	-3,451	-2,782	-4,069	-1,340
Other Income (Expense)
Interest expense	-2,235	-1,973	-4,473	-3,973
Foreign currency transaction loss	-891	-6,478	-981	-6,463
Interest income	0	11	0	23
Other non-operating income (loss), net	-18	-75	42	19
Net Other Expense	-3,144	-8,515	-5,412	-10,394
Loss from Continuing Operations Before Income Tax	-6,595	-11,297	-9,481	-11,734
Benefit from income tax	466	340	489	78
Net loss	-6,129	-10,957	-8,992	-11,656
Net loss attributable to noncontrolling interests	130	1,830	649	1,855
Net loss attributable to Caspian Services, Inc	-5,999	-9,127	-8,343	-9,801
Other Comprehensive Income (Loss)
Foreign currency translation adjustment	72	-4,593	84	-4,593
Comprehensive loss	-5,927	-13,720	-8,259	-14,394
Comprehensive loss attributable to non-controlling interest	-649	497	-649	447
Comprehensive loss attributable to Caspian Services, Inc.	($6,576)	($13,223)	($8,908)	($13,947)
Basic and Diluted Loss per Share	($0.11)	($0.17)	($0.16)	($0.19)
Weighted Average Shares Outstanding	52,657,574	52,657,574	52,657,574	52,657,574

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Revenues
Related Parties Geophisical Services Revenues	$880	$0	$880	$0
Related Parties Marine Base Services Revenue	$58	$535	$58	$665

CONDENSED_CONSOLIDATED_STATEME2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net loss	($8,992)	($11,656)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	2,456	2,277
Impairment loss	0	56
Accrued interest on accelerated put option	992	1,039
Foreign currency transaction loss	981	6,463
Stock based compensation	0	3
Changes in current assets and liabilities:
Trade accounts receivable	4,977	2,652
Trade accounts receivable from related parties	-642	1,237
Short-term notes from related parties	-3,006	0
Other receivables	196	854
Inventories	-90	-339
Inventories held for sale	0	56
Prepaid taxes	1,162	-186
Advances paid	225	156
Deferred tax assets	-1,024	-49
Prepaid expenses and other current assets	76	22
Long-term prepaid taxes	-137	628
Long-term other receivables, net of current portion	-160	18
Accounts payable	-411	-400
Accounts payable to related parties	0	-1,826
Accrued expenses	4,008	6,419
Taxes payable	-209	-491
Deferred revenue	29	-8
Long-term deferred income tax liability	-60	-48
Net cash provided by operating activities	371	6,877
Cash flows from investing activities:
Payments to purchase vessels, equipment and property	-55	-3,002
Net cash provided by (used in) investing activities	-55	-3,002
Cash flows from financing activities:
Payments on long-term debt	-300	-300
Net cash used in financing activities	-300	-300
Effect of exchange rate changes on cash	-493	-4,525
Net change in cash	-477	-950
Cash at beginning of period	1,957	3,973
Cash at end of period	1,480	3,023
Supplemental disclosure of cash flow information:
Cash paid for interest	300	300
Non-cash capital expenditures	$1,736	$0

NOTE_1_THE_COMPANY_AND_BASIS_O

NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION	6 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION	Interim Financial Information – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, they are condensed and do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair and comparable presentation have been included and are of a normal recurring nature. The accompanying financial statements should be read in conjunction with the Caspian Services, Inc. (the “Company” or “CSI”) most recent annual financial statements included in its annual report on Form 10-K filed with the SEC on January 13, 2015. Operating results for the six-month period ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending September 30, 2015.

	Principles of Consolidation – The accompanying condensed consolidated financial statements are presented in conformity with US GAAP and include operations and balances of Caspian Services, Inc. and its wholly-owned subsidiaries: Caspian Services Group Limited (“CSGL”), Caspian Services Group LLP (“Caspian LLP”), Caspian Services Group B.V. (“Caspian B.V.”), Caspian Services LLC (“Caspian LLC”), Caspian Geophysics, Ltd (“CGEO”), TatArka LLP (“TatArka”), Caspian Real Estate, Ltd (“CRE”) and Kyran Holdings Limited (“Kyran”); and include majority owned subsidiaries: Balykshi LLP (“Balykshi”) and Mangistau Oblast Boat Yard LLP (“MOBY”), collectively “Caspian” or the “Company.” TatArka owns a 40% non-controlling interest in Veritas-Caspian LLP (“Veritas-Caspian”). Ownership of up to 50% noncontrolling interests are accounted for by the equity method. Intercompany balances and transactions have been eliminated in consolidation.

	Business Condition – The Company funded a portion of the construction of its marine base through a combination of debt and equity financing pursuant to which the European Bank for Reconstruction and Development (“EBRD”) provided $18,600 of debt financing. EBRD also made an equity investment in the marine base in the amount of $10,000 in exchange for a 22% equity interest in Balykshi.

	In connection with EBRD’s 22% equity interest in Balykshi, the Company entered into a Put Option Agreement granting EBRD the right to require the Company to repurchase the 22% equity interest based on Balykshi’s fair market value. The put option is exercisable between June 2013 and June 2017. This agreement also contains an acceleration feature that, should a triggering event occur, grants EBRD the right to require the Company to repurchase the $10,000 equity investment at a 20% annual rate of return at any time following the triggering event.

	In accordance with US GAAP the put option is an unconditional obligation and is measured at its fair value based on an estimate of the amount of cash that would be required to settle the liability.

	Under the terms of the EBRD Loan Agreement, as amended, Balykshi is required to repay the loan principal and accrued interest in eight equal semi-annual installments commencing November 20, 2011 and then occurring each May 20 and November 20 thereafter until fully repaid. As of the date of this report, none of the required semi-annual repayment installments have been made. The failure to pay the principal or interest on the EBRD loan when due may constitute an event of default under the EBRD Loan Agreement. The EBRD financing agreements have acceleration right features that, in the event of default, allow EBRD to declare the loans and accrued interest immediately due and payable. As a result, the Company has included the EBRD loan and all accrued interest as current liabilities at March 31, 2015 and September 30, 2014. Additionally, an event of default may trigger the acceleration clause in the Put Option Agreement with EBRD which would allow EBRD to put its $10,000 investment in Balykshi back to the Company. If EBRD were to accelerate its put right, the Company could be obligated to repay the initial investment plus a 20% annual rate of return. The balance of the accelerated put option liability was $22,641 and $21,649 as of March 31, 2015 and September 30, 2014, respectively. This balance includes the 20% rate of return on the $10,000 investment and is classified as a current liability. EBRD also previously notified the Company that it believes the Company and Balykshi are in violation of certain other covenants of the EBRD financing agreements. As of the date of this report, to the Company’s knowledge, EBRD has not sought to accelerate repayment of the loan or the put option.

	The Company continues to engage in discussions with EBRD regarding a possible restructuring of its financial obligations to EBRD.

	To help the Company meet its additional funding obligations to construct the marine base, in 2008 the Company entered into two facility agreements pursuant to which the Company received debt funding of $30,000. In June and July 2011 Mr. Bakhytbek Baiseitov (the “Investor”) acquired the two facility agreements. In connection with restructuring the facility agreements, each of which matured in 2011, in September 2011 the Company issued Investor two secured promissory notes, a Secured Non-Negotiable Promissory Note in the principal amount of $10,800 (“Non-Negotiable Note”) and a Secured Convertible Consolidated Promissory Note in the principal amount of $24,446 (“Consolidated Note”).

	Pursuant to the terms of the Non-Negotiable Note, Investor may, at any time, demand and receive payment of the Note by the issuance of common stock of the Company. The price per share for principal and interest is $0.12. The Investor has the right, at any time, to demand the issuance of shares in satisfaction of the Non-Negotiable Note. In September 2014 the Company and Investor agreed to extend the maturity date of the Non-Negotiable Note from September 30, 2014 to June 30, 2015. If the issuance of common stock has not been demanded by Investor or made at the election of the Company by the June 30, 2015 maturity date, the Company must repay the principal and interest in cash.

	Pursuant to the terms of the Consolidated Note, interest accrues at 12% per annum and shall be paid semi-annually in arrears on each six month anniversary of the Issuance Date (September 30, 2011). The Consolidated Note provides for a default rate of interest of 13% per annum upon the occurrence and during the continuation of an event of default, which shall be payable in cash upon demand. In September 2014 the Company and Investor agreed to extend the maturity date of the Consolidated Note from September 30, 2014 to June 30, 2015. The unpaid principal amount of the Consolidated Note, and any accrued but unpaid interest thereon, is due and payable on June 30, 2015.

	Investor has the right at any time following a five day written notice to convert all or any portion of the principal and any accrued but unpaid interest under the Consolidated Note into common stock at $0.10 per share. Any conversion that would result in a change in control of the Company without the prior consent of EBRD could result in a breach of the EBRD financing agreements.

	As of the date of this report, none of the semi-annual interest payments have been made when due. The Company has, however, made partial interest payments to Investor totaling $2,600 in reduction of interest due as of March 31, 2015.

	The failure to pay interest on the Consolidated Note when due, may be deemed an event of default under the Consolidated Note. In the event of a default that remains uncured, Investor may, at any time, demand immediate repayment of the Consolidated Note. As a result, the Company has included the Consolidated Note and all accrued but unpaid interest as current liabilities at March 31, 2015 and September 30, 2014. As of the date of this report, to the Company’s knowledge, Investor has not demanded immediate repayment of the Consolidated Note.

	In August 2008 MOBY entered into a Loan Agreement (the “MOBY Loan Agreement”) with EBRD. In connection with the loan, EBRD required the Company and others to, among other things, execute a Deed of Guarantee and Indemnity (“Guarantee”), guaranteeing the repayment of the MOBY loan. The guarantee obligation of each party is limited to each party’s respective ownership interest in MOBY.

	The outstanding balance of the MOBY loan was $6,153 and $5,998 as of March 31, 2015 and September 30, 2014, respectively, including accrued and unpaid interest. The interest rate under the MOBY loan is generally the interbank rate plus a margin of 3.6%. The MOBY Loan Agreement provides that during any period when the loan is in default the rate of interest shall be the interbank rate plus a margin of 3.6% plus 2% per annum. The MOBY Loan Agreement provides for 14 equal semi-annual installment payments of principal and interest on June 15 and December 15, commencing on or after August 2011. As of March 31, 2015 and September 30, 2014 MOBY had made no semi-annual installment payments and was in violation of certain financial covenants under the MOBY Loan Agreement. Pursuant to the MOBY Loan Agreement, if an event of default occurs and is continuing, EBRD may, at its option, by notice to MOBY, declare all or any portion of the principal and accrued interest of the loan due and payable on demand, or immediately due and payable without further notice and without presentment, demand or protest.

	To the Company’s knowledge, to date EBRD has taken no action to establish the defaults or to increase or accelerate the debt obligations of MOBY or the guarantee obligation of the Company. Should EBRD determine to take action, the Company would not have sufficient funds to repay its portion of the MOBY loan or the guarantee and would be forced to seek sources of funding to satisfy these obligations.

	Should EBRD or Investor determine to accelerate the Company’s financial obligations to them, the Company currently has insufficient funds to repay its obligations to EBRD or Investor, individually or collectively, and would be forced to seek other sources of funds to satisfy these obligations. Given the Company’s current and near-term anticipated operating results, the difficult credit and equity markets and the Company’s current financial condition, the Company believes it would be very difficult to obtain new funding to satisfy these obligations. If the Company were unable to obtain funding to meet these obligations, EBRD or Investor could seek any legal remedy available to them to obtain repayment, including forcing the Company into bankruptcy, or in the case of the EBRD loan, which is collateralized by the assets, including the marine base, and bank accounts of Balykshi, CRE and MOBY, foreclosure by EBRD on such assets and bank accounts. As of March 31, 2015 the
	book value of collateralized assets was approximately $30,821. The Company has also agreed to collateralize Investor’s Notes with non-marine base related assets. The ability of the Company to continue as a going concern is dependent upon, among other things, its ability to (i) successfully restructure its financial obligations to EBRD and Investor on terms that will allow the Company to service the restructured obligations, (ii) generate sufficient revenue from operations to satisfy its financial obligations, and/or (iii) identify a financing source that will provide the Company the ability to satisfy its financial obligations. Uncertainty as to the outcome of these factors raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company intends to continue its efforts to restructure its financial obligations to EBRD and Investor.

	Nature of Operations – The Company’s business consists of three major business segments:

	Vessel Operations – Vessel operations consist of chartering a fleet of shallow draft offshore support vessels to customers performing oil and gas exploration activities in the Caspian Sea.

	Geophysical Services – Geophysical services consist of providing seismic data acquisition services to oil and gas companies operating onshore in Kazakhstan.

	Marine Base Services – Marine base services consist of operating a marine base with a boat repair and drydocking services yard located at the Port of Bautino on the North Caspian Sea.

	Correction to Previously Issued Financial Statements – In the current period, the Company identified mathematical errors in the calculation of basic and diluted loss per share for the three month and the six month periods ending March 31, 2014. This mathematical error was related to the use of the net loss as the numerator. To correct this mathematical error, the Company changed the formula to use the net loss attributable to the Caspian Services as the numerator. The Company has assessed the impact of the mathematical error on each period impacted under the guidance of Accounting Standards Codification Topic 250-10, Accounting Changes and Error Corrections, related to SEC Staff Accounting Bulletin ("SAB") No.99, Materiality, and has determined that the impact of the error was not material to the previously issued unaudited condensed consolidated financial statements. The Company has elected to revise its previously issued unaudited condensed consolidated financial statements to facilitate comparisons across periods. The Company has corrected the basic and diluted loss per share for the three month and the six month periods ending March 31, 2014, as follows:

		For The Three Months			For The Six Months
		Ended March 31, 2014			Ended March 31, 2014
		Previously reported	Revised	Difference	Previously reported	Revised	Difference
	Basic and Diluted Loss per Share	$ (0.21)	$ (0.17)	$ (0.04)	$ (0.22)	$ (0.19)	$ (0.03)

	Basic and Diluted Loss Per Share – Basic loss per common share is calculated by dividing net loss attributable to Caspian Services by the weighted-average number of common shares outstanding. Diluted loss per common share is calculated by dividing net loss attributable to Caspian Services by the weighted-average number of common shares outstanding giving effect to potentially dilutive issuable common shares.

	For the three and six months ended March 31, 2015 the Company had 800,000 options outstanding and 437,555,000 potential shares related to convertible debt that were not included in the computation of diluted loss per common share because they would be anti-dilutive.

	For the three and six months ended March 31, 2014 the Company had 800,000 options outstanding, 147,939 non-vested restricted shares outstanding and 402,913,333 potential shares related to convertible debt that were not included in the computation of diluted loss per common share because they would be anti-dilutive.

	Fair Value of Financial Instruments – The carrying amounts reported in the accompanying condensed consolidated financial statements for other receivables, accounts receivables from related parties, accounts payable to related parties and accrued expenses approximate fair values because of the immediate nature or short-term maturities of these financial instruments. The carrying amount of long-term debts approximates fair value due to the stated interest rates approximating prevailing market rates.

	Accelerated Put Option Liability – In connection with EBRD’s $10,000 equity investment to purchase a 22% equity interest in Balykshi, the Company entered into a Put Option Agreement granting EBRD the right to require the Company to repurchase the 22% equity interest. The put option is exercisable between June 2013 and June 2017. The put price is determined based on the fair market value of Balykshi as mutually agreed by the parties. If the parties are unable to agree upon a fair market valuation, the parties agree to hire a third party expert to determine the put price on the basis of the fair market value of Balykshi, as set forth in the Put Option Agreement. In the event there is a change in control of the Company, EBRD has the right to require the repurchase of the equity interest at its fair market value. The Put Option Agreement also contains an acceleration feature. Should Balykshi: (i) default on $1,000 or more of debt; (ii) fail to meet the obligations of any of the agreements between Balykshi, the Company and EBRD; (iii) be found to have made false representations to EBRD; or (iv) be declared insolvent, EBRD has the right to accelerate the put option. If the put option is accelerated, EBRD can require the Company to repurchase the $10,000 equity investment plus a 20% per annum rate of return, taking into account any dividend or other distribution received by EBRD, at any time following one of the events mentioned above. Due to the fact that certain events of default under the EBRD Loan Agreement may have occurred and that such could trigger EBRD’s accelerated put right, we have reflected an accelerated put option liability of $22,641, although, as of the date of this quarterly report on Form 10-Q, to the Company’s knowledge, EBRD has not sought to accelerate the put option.

	Revenue Recognition – Vessel revenues are usually derived from time charter contracts on a rate-per-day of service basis; therefore, vessel revenues are recognized on a daily basis throughout the contract period. These time charter contracts are generally on a term basis. The base rate of hire for a contract is generally a fixed rate; however, these contracts often include clauses to recover mobilization and demobilization costs and specific additional costs which are billed on a monthly basis.

	Geophysical service revenue is recognized when services are rendered, accepted by the customer and collectability is reasonably assured. Direct costs are charged to each contract as incurred along with allocated indirect costs for the specific period of service. Losses on contracts are recognized during the period in which the loss first becomes probable and reasonably estimated. Due to the nature of some of the geophysical services provided, certain customers have prepaid their contract services. These prepayments have been deferred and are recognized as revenue as the services are provided.

Marine base service revenue is recognized when services are rendered, accepted by the customer and collectability is reasonably assured.

Receivables – In the normal course of business the Company extends credit to its customers on a short-term basis. The principal customers for the Company’s marine vessels are major oil and natural gas exploration, development and production companies and their contractors. Credit risks associated with these customers are considered minimal. Dealings with smaller, local companies pose the greatest risks. For new geophysical services customers the Company typically requires an advance payment and the Company retains the seismic data generated from these services until payment is made in full. The Company routinely reviews accounts receivable balances and makes provisions for doubtful accounts as necessary. Accounts are reviewed on a case-by-case basis and losses are recognized in the period the Company determines it is likely that receivables will not be fully collected. The Company may also provide a general provision for accounts receivable based on existing economic conditions.

Impairment of Long-Lived Assets and Long-Lived Assets for Disposal – Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount that the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences in assets and liabilities and their respective tax bases and attributable to operating loss carry forwards. Differences generally result from the calculation of income under accounting principles generally accepted in the United States of America and the calculation of taxable income calculated under Kazakhstan income tax regulations.

The current regime of penalties and interest related to reported and discovered violations of Kazakhstan’s laws, decrees and related regulations can be severe. Penalties include confiscation of the amounts in question for currency law violations, as well as fines of generally 100% of the unpaid taxes. Interest is assessable at rates of generally 0.06% per day. As a result, penalties and interest can result in amounts that are multiples of any unreported taxes. At March 31, 2015 and 2014 no interest or penalties have been accrued as a result of any tax positions taken. In the event interest or penalties are assessed, the Company will include these amounts related to unrecognized tax benefits in income tax expense.

A deferred tax liability is not recognized for the following types of temporary differences unless it becomes apparent that those temporary differences will reverse in the foreseeable future:

(a) An excess of the amount for financial reporting over the tax basis of an investment in a foreign subsidiary or a foreign corporate joint venture, that is essentially permanent in duration; or

(b) Undistributed earnings of a domestic subsidiary or a domestic corporate joint venture that is essentially permanent in duration.


Drydocking Costs – The Company’s vessels must be periodically drydocked and undergo certain inspections to maintain their operating classification, as mandated by certain maritime regulations. Costs incurred to drydock the vessels for certification are capitalized and amortized over the period until the next drydocking, which is generally 24 months. Drydocking costs comprise painting the vessels’ hulls and sides, recoating cargo and fuel tanks, and performing other engine and equipment maintenance activities to bring the vessels into compliance with classification standards.

Foreign Currency Transactions – Caspian Services, Inc., the parent company of the subsidiaries, makes its principal investing and financing transactions in United States Dollars (USD), which is also its functional currency. Transactions and balances denominated in other currencies have been translated into USD using historical exchange rates. Exchange gains and losses from holding foreign currencies and having liabilities payable in foreign currencies are included in the results of operations.

USD is also the functional currency of CSGL, CGEO and CRE.

The Kazakh Tenge (KZT) is the functional currency of Caspian LLP, TatArka, Balykshi, Kyran and MOBY; the Euro is the functional currency of Caspian B.V. and the Russian Ruble is the functional currency of Caspian LLC. Their respective balance sheets have been translated into USD at the exchange rates prevailing at each balance sheet date. Their respective statements of operations and comprehensive income (loss) have been translated into USD using the average exchange rates prevailing during the periods of each statement. The corresponding translation adjustments are part of accumulated other comprehensive income (loss) and are shown as part of shareholders’ equity.

The translation of KZT, Euro and Russian Ruble denominated assets and liabilities into USD for the purpose of these condensed consolidated financial statements does not necessarily mean the Company could realize or settle, in USD, the reported values of these assets and liabilities in USD. Likewise it does not mean the Company could return or distribute the reported USD value of its subsidiaries’ capital to its shareholders.

Use of Estimates – The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Comprehensive Loss – Total comprehensive loss consists of net loss and changes in accumulated other comprehensive loss. Accumulated other comprehensive loss is presented in the consolidated statements of comprehensive income (loss) and consists of foreign currency translation adjustments.

Concentration of Revenue – During the six months ended March 31, 2015 vessel revenue from four customers that together represented approximately 72% of total vessel revenue as follows, Customer A – 22%; Customer B – 20%; Customer C – 18%; and Customer D – 12%.

During the six months ended March 31, 2015 geophysical service revenue from two customers that together represented approximately 96% of total geophysical revenue as follows, Customer A – 54% and Customer B – 42%.

During the six months ended March 31, 2015 marine base revenue from three customers represented 75% of total marine base revenue as follows, Customer A – 41%, Customer B – 24%, and Customer C – 10% .

Recent Accounting Pronouncements –

In April 2014 the FASB issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements and Property, Plant, and Equipment. Reporting discontinued operations and disclosures of disposals of components of an entity. The Company does not believe that adoption of the standard will have a material impact on its results of operations or financial position upon adoption.

In May 2014 the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. The objective of this update is to provide a robust framework for addressing revenue recognition issues and, upon its effective date, replaces almost all existing revenue recognition guidance. This update is effective in annual reporting periods beginning after December 15, 2016 and the interim periods within that year. The Company is evaluating the impact of this update on its financial statements.

In June 2014 FASB issued Accounting Standards Update No. 2014-12, Compensation - Stock Compensation (Topic 718) – Accounting for Share Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period, be treated as a performance condition. ASU 2014-12 is effective for interim and annual periods beginning after December 15, 2015. The amendments can be applied prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented and to all new or modified awards thereafter. Early adoption is permitted. The adoption of this standard is not expected to have a material effect to the Company’s operating results or financial condition.

In August 2014 the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern (ASU 2014-15). The guidance in ASU 2014-15 sets forth management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that management's plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s operating results or financial condition.

The Company has considered all recent accounting pronouncements issued or proposed by the FASB and other standards-setting bodies since the last audit of its financial statements. The Company does not believe that these pronouncements will have a material effect on the Company’s financial statements.

Subsequent Events – The Company’s management has evaluated subsequent events through the date the financial statements were issued and has found no subsequent events to report.

NOTE_2_ATASH_MARINE_BASE

NOTE 2 - ATASH MARINE BASE	6 Months Ended
NOTE 2 - ATASH MARINE BASE	Mar. 31, 2015
Notes to Financial Statements
NOTE 2 - ATASH MARINE BASE	Additional dredging work at the marine base is still required. Currently, Balykshi has insufficient funds to complete the work. Failure to complete the dredging could subject Balykshi to certain penalties, including the cancelation of permits and termination of operational activities at the marine base until the dredging is completed. The failure by Balykshi or the Company to provide financing for, or to complete, dredging could constitute a default under the EBRD financing agreements.

	In 2008 Balykshi entered into an agreement with the Investment Committee of the Republic of Kazakhstan and agreed to a schedule of work to be performed at the marine base. As of the date of this report, Balykshi has failed to complete approximately $3,800 of the agreed upon scheduled work, including dredging, which could result in the cancellation of tax preferences granted to Balykshi by the Investment Committee.

NOTE_3_NOTES_PAYABLE

NOTE 3 - NOTES PAYABLE	6 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 3 - NOTES PAYABLE	Notes payable consist of the following:

		March 31,	September 30,
		2015	2014

	Secured non-negotiable promissory note payable to Investor; interest at 0.26%	$ 10,899	$ 10,885
	due June 30, 2015

	Secured convertible consolidated promissory note payable to Investor; interest at 12%	34,673	32,862
	(default interest at 13%) due June 30, 2015

	Balykshi- EBRD loan and accrued interest at 7% plus the interbank rate due May 2015
	(default interest at 9% plus the interbank rate ); secured by property and bank accounts	26,714	25,539

	MOBY- EBRD loan and accrued interest at 3.6% plus the interbank rate due June 2018 (default interest at 5.6% plus the interbank rate )	6,153	5,998


	Total Long-term Debt	78,439	75,284
	Less: Current Portion	(78,439)	(75,284)
	Long-term Debt - Net of Current Portion	$ -	$ -

	Notes Payable to Investor

	In 2008 the Company entered into Facility agreements with Altima Central Asia (Master) Fund Ltd. (“Altima”) and Great Circle Energy Services LLC (“Great Circle”). Pursuant to the Facility agreements, each party made an unsecured loan to the Company in the amount of $15,000. The Altima loan matured and became due and payable in June 2011 while the Great Circle loan matured and became due and payable in December 2011. The Altima and Great Circle loans (“Loans”) bore interest at 13% per annum. At June 30, 2011 these Loans and accrued interest totaled $42,264. During June and July 2011 Investor acquired these Loans and on September 30, 2011 the Company and Investor agreed to restructure the Loans. Prior to the restructuring, the Company made payments to Investor reducing the total debt balance to $37,246. Within 30 days of closing, the Company agreed to make a $2,000 cash payment to Investor which was credited as a reduction of principal due. This payment was made during fiscal 2012. In satisfaction of the remaining outstanding balance of the restructured loan obligations, the Company issued Investor the Non-Negotiable Note in the principal amount of $10,800 and the Consolidated Note in the principal amount of $24,446. The Company has agreed to collateralize Investor’s Notes with non-marine base-related assets.

	Non-Negotiable Promissory Note

	Pursuant to the terms of the Non-Negotiable Note, Investor may, at any time, demand and receive payment of the Non-Negotiable Note by the issuance of common stock of the Company. The price per share for principal and interest is $0.12. Investor has the right, at any time, to demand the issuance of shares in satisfaction of the Non-Negotiable Note. The Company has the right to pay the principal and interest under the Non-Negotiable Note by the issuance of Company common stock on the earlier of: (i) the date on which the Company and Investor complete renegotiation of the terms of the financing between the Company and EBRD; or (ii) the date when the Company and Investor terminate restructuring negotiations with EBRD. The Non-Negotiable Note initially had a maturity date of September 30, 2014. In September 2014 the Company and Investor entered into a first amendment to this Note, which extended the maturity date to June 30, 2015 (Extended Maturity Date). If the issuance of common stock had not been demanded by Investor or made at the election of the Company by the Extended Maturity Date the Company must repay the principal and interest in cash.

	The Company is required to pay interest on the principal amount of the Non-Negotiable Note in common stock at the time of payment of the principal. Interest accrues at a rate per annum equal to 0.26%, until the Extended Maturity Date.

	The Company will issue the Investor 90 million shares of restricted common stock to settle the principal amount of the Non-Negotiable Note, excluding shares that will be issued to Investor in satisfaction of accrued interest.

	As the Non-Negotiable Note matures in less than twelve months, it has been treated as a current liability in the accompanying financial statements.

	Convertible Consolidated Promissory Note

	Interest accrues on the Consolidated Note at 12% per annum and is required to be paid semi-annually in arrears on each six month anniversary of the Issuance Date (September 30, 2011). The Consolidated Note provides for a default rate of interest of 13% per annum upon the occurrence and during the continuation of an event of default, as defined in the Consolidated Note, which shall be payable in cash upon demand.

	The unpaid principal amount of the Consolidated Note, and any accrued but unpaid interest thereon, was initially due and payable on September 30, 2014. In September 2014 a first amendment to this Note was entered into between the Company and Investor, which extended the maturity date to June 30, 2015. The Company may elect to prepay principal in increments of $1,000 at the time of any scheduled interest payment, except in the case of full repayment of principal and interest which may be made at any time.

	As of the date of this report, none of the semi-annual interest payments have been made on the date they were due. During fiscal 2013 the Company paid $1,600 to Investor, which was credited as a reduction of interest due under the Consolidated Note. An additional $700 was paid during the fiscal 2014 and $300 was paid in December 2014. The failure to pay the interest on the Consolidated Note may be deemed an event of default under the Consolidated Note. In the event of a default that remains uncured, Investor may, at any time, demand immediate repayment of the Consolidated Note. As a result, the Company has included the Consolidated Note and all accrued interest as current liabilities at March 31, 2015 and September 30, 2014.

	The Consolidated Note is superior in rank to all future unsecured indebtedness of the Company and its subsidiaries, except for the EBRD Indebtedness.

	With the increase in the Company’s authorized common stock in May 2013, Investor now has the right at any time following a five day written notice to convert all or any portion of the principal and any accrued but unpaid interest into common stock at $0.10 per share. However any conversion that would result in a change in control of the Company without the prior consent of EBRD could result in a breach of the EBRD financing agreements.

	Registration Rights Agreement

	In connection with restructuring the Facility agreements, the Company and Investor agreed to enter into a Registration Rights Agreement granting Investor the right to require the Company to register all or any part of the shares held by Investor, including but not limited to, any shares issued in satisfaction of the Notes. As of the date of this report no agreement has been finalized.

	EBRD Loan to Balykshi

	EBRD’s financing agreements contain certain financial and other covenants, the violation of which could be deemed a default under those agreements. Pursuant to the terms of the financing agreements, following delivery of written notice to Balykshi or the Company of an event of default and the expiration of any applicable grace period, EBRD may declare all or any portion of its loan, together with all accrued interest, immediately due and payable or payable on demand. The EBRD financing agreements also provide that in the event any indebtedness of the Company in excess of $1,000 is declared or otherwise becomes due and payable prior to its specified maturity date, such may be deemed an event of default which would allow EBRD to declare its loan immediately due and payable or payable on demand. As the EBRD loan is secured, in the event Balykshi or the Company are unable to repay the loan, EBRD could have the right to foreclose on the assets and bank accounts of Balykshi and CRE, including the marine base.

	Under the terms of the EBRD Loan Agreement, as amended, Balykshi is required to repay the loan principal and accrued interest in eight equal semi-annual installments commencing November 20, 2011 and then occurring each May 20 and November 20 thereafter until fully repaid. As of the date of this report, none of the semi-annual repayment installments have been made by the Company. The failure to pay principal or interest when due constitutes an event of default under the EBRD Loan Agreement. The EBRD Loan Agreement provides that if the Borrower fails to pay when due any amount payable by it under the Loan Agreement, the overdue amount shall bear interest at a rate that is 2% higher than the non-default rate of interest.

	EBRD Loan to MOBY

	As of March 31, 2015 the outstanding balance of the MOBY loan was $6,153, including accrued and unpaid interest. The interest rate under the MOBY loan is generally the interbank rate plus a margin of 3.6%. The MOBY Loan Agreement provides that during any period when the loan is in default, the rate of interest shall be the interbank rate plus a margin of 3.6% plus 2% per annum. The MOBY Loan Agreement provides for 14 equal semi-annual installment payments of principal and interest on June 15 and December 15, commencing after August 2011 (the third anniversary of the MOBY Loan Agreement.)

	As of March 31, 2015 and September 30, 2014 MOBY had made no semi-annual installment payments and was in violation of certain financial covenants under the MOBY Loan Agreement. Pursuant to the MOBY Loan Agreement, if an event of default occurs and is continuing, EBRD may, at its option, by notice to MOBY, declare all or any portion of the principal and accrued interest of the loan due and payable on demand, or immediately due and payable without further notice and without presentment, demand or protest.

	To date, to the Company’s knowledge, EBRD has taken no action to establish the defaults or to increase or accelerate the debt obligations of MOBY or the guarantee obligations of the Company under the Guarantee. Should EBRD determine to take action, MOBY would not have sufficient funds to repay its portion of the MOBY Loan nor would the Company have sufficient funds to pay it obligations under the Guarantee.

The Company is engaged in ongoing discussions with EBRD about restructuring the terms of its financial obligations to EBRD, but there is no guarantee the Company will be successful in doing so.

NOTE_4_COMMITMENTS_AND_CONTING

NOTE 4 - COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE 4 - COMMITMENTS AND CONTINGENCIES	Economic Environment – In recent years, Kazakhstan has undergone substantial political and economic change. As an emerging market Kazakhstan does not possess a well-developed business infrastructure, which generally exists in more mature free market economies. As a result, operations carried out in Kazakhstan can involve significant risks, which are not typically associated with those in developed markets. Instability in the market reform process could subject the Company to unpredictable changes in the basic business infrastructure in which it currently operates. Uncertainties regarding the political, legal, tax or regulatory environment, including the potential for adverse changes in any of these factors could affect the Company’s ability to operate commercially. Management is unable to estimate what changes may occur or the resulting effect of such changes on the Company’s financial condition or future results of operations.

NOTE_5_RELATED_PARTY_TRANSACTI

NOTE 5 - RELATED PARTY TRANSACTIONS	6 Months Ended
NOTE 5 - RELATED PARTY TRANSACTIONS	Mar. 31, 2015
Notes to Financial Statements
NOTE 5 - RELATED PARTY TRANSACTIONS	Seismic revenue recognized from Sequa Petroleum (a company related through common ownership) for the three and six months ended March 31, 2015 was $880.

	Revenue from the agent fee for the marine base services recognized from Sayat Media (a company related through common management) for the three and six months ended March 31, 2015 was $49.

	Marine base services revenue from Kazmortansflot (a company related through participation in a joint venture) for the three and six months ended March 31, 2015 was $0 and $9, respectively.

	Lease revenue recognized from MOBY for the three and six months ended March 31, 2014 was $535 and $665, respectively.

	Accounts receivable from related parties as of March 31, 2015 and September 30, 2014 consisted of the following:

	Related Party's Name	Description	31-Mar-15	30-Sep-14

	Sequa Petroleum	Seismic services	$ 456	$ -
	Demeu Energy	Advance given for vehicles delivery	269	275
	Sayat Media	Receivable from agent for marine base services	185	-
	Caspian Geo Consulting	Advance given for equipment delivery	162	165
		Allowance for doubtful accounts	(430)	(440)
	TOTAL		$ 642	$ -

	Accounts payable to related parties as of March 31, 2015 and September 30, 2014 consisted of the following:

	Related Party's Name	Description	31-Mar-15	30-Sep-14

	Sayat Media	Other services	$ 15	$ 13
	Others	Others	66	63
	TOTAL		$ 81	$ 76

	Short-term notes from related parties as of March 31, 2015 and September 30, 2014 consisted of the following:

	Related Party's Name	Description	31-Mar-15	30-Sep-14

	Caspian Geo Consulting	Notes Receivable	$ 2,963	$ -
	Sayat Media	Notes Receivable	-	70
	TOTAL		$ 2,963	$ 70

	Sayat Media – In September 2014 Balykshi entered into loan agreement with Sayat Media (a company related through Balykshi’s management). Pursuant to the loan agreement Balykshi provided a loan to Sayat Media in the amount of $70. The note receivable bore interest at 5.5% per annum and was scheduled to mature in one year. This loan was fully repaid in November 2014.

	Caspian Geo-Consulting Services LLP – During the period from November 2014 to March 2015 CSG LLP entered into five loan agreements with Caspian Geo-Consulting Services LLP. Pursuant to the loan agreements CSG LLP has provided loans to Caspian Geo-Consulting Services LLP in the amount of $2,963. The notes receivable bear no interest and mature in one year.

NOTE_6_FAIR_VALUE_MEASUREMENTS

NOTE 6 - FAIR VALUE MEASUREMENTS	6 Months Ended
NOTE 6 - FAIR VALUE MEASUREMENTS	Mar. 31, 2015
Notes to Financial Statements
NOTE 6 - FAIR VALUE MEASUREMENTS	Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, a hierarchy has been established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:

	Level 1 – Quoted prices in active markets for identical assets or liabilities.

	Level 2 – Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data.

	Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

	The Company uses fair value to measure certain assets and liabilities on a recurring basis when fair value is the primary measure for accounting. This is done primarily for the put option liability. Fair value is used on a nonrecurring basis to measure certain assets when applying lower of cost or market accounting or when adjusting carrying values and for acquisitions. Fair value is also used when evaluating impairment on certain assets, including goodwill, intangibles, and long-lived assets.

	Recurring basis:

	At March 31, 2015 and September 30, 2014 the Company had two liabilities measured at fair value on a recurring basis.

	The put option liability is a Level 3 measurement, which is fair valued at the put option price plus accrued interest at a rate of 20% annually. The $992 change during the six months ended March 31, 2015 was for the 20% rate of return and it was charged to interest expense.

	The value of the Property held for sale was derived based on estimated sales price of the property. The estimation of sales price is made based on the market prices of similar vessels.

	For Level 3 assets, the Company’s finance department, which reports to the chief financial officer, determines the fair value measurement valuation policies and procedures. At least annually, the finance department determines if the current valuation techniques used in the fair value measurements are still appropriate and evaluates and adjusts the unobservable inputs used in the fair value measurements based on current market conditions and third-party information.

	There were no changes in the valuation techniques during the six months ended March 31, 2015.

			Fair Value Measurements at Reporting Date Using
	Description	31-Mar-15	Level 1	Level 2	Level 3
	Property held for sale	$ 44	$ -	$ -	$ 44
	Put option liability	22,641	-	-	22,641
	Total	$ 22,685	$ -	$ -	$ 22,685


			Fair Value Measurements at Reporting Date Using
		30-Sep-14	Level 1	Level 2	Level 3
	Property held for sale	$ 44	$ -	$ -	$ 44
	Put option liability	21,649	-	-	21,649
	Total	$ 21,693	$ -	$ -	$ 21,693

NOTE_7_SEGMENT_INFORMATION

NOTE 7 - SEGMENT INFORMATION	6 Months Ended
NOTE 7 - SEGMENT INFORMATION	Mar. 31, 2015
Notes to Financial Statements
NOTE 7 - SEGMENT INFORMATION	US GAAP requires disclosures related to components of a company for which separate financial information is available and evaluated regularly by a company’s chief operating decision makers in deciding how to allocate resources and in assessing performance. They also require segment disclosures about products and services as well as geographic area.

	The Company has operations in three segments of its business, namely: Vessel Operations, Geophysical Services and Marine Base Services. All of these operations are located in the Republic of Kazakhstan. Corporate administration is located in the United States of America and the Republic of Kazakhstan.

	Further information regarding the operations and assets of these reportable business segments follows:



		For the Three Months				For the Six Months
		Ended March 31,				Ended March 31,
		2015		2014		2015		2014
	Capital Expenditures
	Vessel Operations	$ 54		$ 356		$ 178		$ 813
	Geophysical Services	29		686		1,736		2,188
	Marine Base Services	2		-		2		-
	Total segments	85		1,042		1,916		3,001
	Corporate assets	-		1		-		1
	Less intersegment investments	(17)		-		(125)		-
	Total consolidated	$ 68		$ 1,043		$ 1,791		$ 3,002


		For the Three Months				For the Six Months
		Ended March 31,				Ended March 31,
		2015		2014		2015		2014
	Revenues
	Vessel Operations	$ 1,371		$ 809		$ 6,508		$ 6,723
	Geophysical Services	1,094		3,155		2,096		7,268
	Marine Base Services	3,173		866		3,587		3,077
	Total segments	5,638		4,830		12,191		17,068
	Corporate revenue	-		-		-		-
	Less intersegment revenues	(2,973)		(268)		(3,429)		(2,748)
	Total consolidated	$ 2,665		$ 4,562		$ 8,762		$ 14,320

	Depreciation and Amortization
	Vessel Operations	$ (446)		$ (475)		$ (892)		$ (996)
	Geophysical Services	(408)		(284)		(793)		(607)
	Marine Base Services	(382)		(308)		(770)		(674)
	Total segments	(1,236)		(1,067)		(2,455)		(2,277)
	Corporate depreciation and amortization	(1)		-		(1)		-
	Total consolidated	$ (1,237)		$ (1,067)		$ (2,456)		$ (2,277)

	Interest expense
	Vessel Operations	$ -		$ -		$ -		$ -
	Geophysical Services	-		-		-		-
	Marine Base Services	(1,664)		(1,442)		(3,318)		(2,904)
	Total segments	(1,664)		(1,442)		(3,318)		(2,904)
	Corporate interest expense	(571)		(531)		(1,155)		(1,069)
	Total consolidated	$ (2,235)		$ (1,973)		$ (4,473)		$ (3,973)

	Income/(Loss) Before Income Tax
	Vessel Operations	$ (1,400)		$ (1,768)		$ (490)		$ (1,206)
	Geophysical Services	(1,073)		174		(1,766)		1,733
	Marine Base Services	(3,197)		(8,691)		(5,573)		(10,541)
	Total segments	(5,670)		(10,285)		(7,829)		(10,014)
	Corporate loss	(925)		(1,012)		(1,652)		(1,720)
	Total consolidated	$ (6,595)		$ (11,297)		$ (9,481)		$ (11,734)

		For the Three Months				For the Six Months
		Ended March 31,				Ended March 31,
		2015		2014		2015		2014
	Benefit from (Provision for) Income Tax
	Vessel Operations	$ 287		$ 339		$ 156		$ 599
	Geophysical Services	181		1		335		(521)
	Marine Base Services	-		-		-		-
Total segments	468		340		491		78
Corporate provision for income tax	(2)		-		(2)		-
Total consolidated	$ 466		$ 340		$ 489		$ 78

Loss/(Income) attributable to Noncontrolling Interests
Vessel Operations	$ -		$ -		$ -		$ -
Geophysical Services	-		-		-		-
Marine Base Services	130		1,830		649		1,855
Total segments	130		1,830		649		1,855
Corporate noncontrolling interest	-		-		-		-
Total consolidated	$ 130		$ 1,830		$ 649		$ 1,855

Net (Loss)/Income attributable to Caspian Services Inc.
Vessel Operations	$ (1,113)		$ (1,429)		$ (334)		$ (607)
Geophysical Services	(892)		175		(1,431)		1,212
Marine Base Services	(3,067)		(6,861)		(4,924)		(8,686)
Total segments	(5,072)		(8,115)		(6,689)		(8,081)
Corporate loss	(927)		(1,012)		(1,654)		(1,720)
Total consolidated	$ (5,999)		$ (9,127)		$ (8,343)		$ (9,801)

					March 31,		September 30,
Segment Assets					2015		2014
Vessel Operations					$ 17,302		$ 15,219
Geophysical Services					16,632		18,663
Marine Base Services					67,480		73,001
Total segments					101,414		106,883
Corporate assets					700		766
Less intersegment investments					(40,701)		(40,581)
Total consolidated					$ 61,413		$ 67,068

NOTE_1_THE_COMPANY_AND_BASIS_O1

NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION AND ACCOUNTING POLICIES (Policies)	6 Months Ended
	Mar. 31, 2015
Note 1 - Company And Basis Of Presentation And Accounting Policies Policies
Interim Financial Information	Interim Financial Information – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, they are condensed and do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair and comparable presentation have been included and are of a normal recurring nature. The accompanying financial statements should be read in conjunction with the Caspian Services, Inc. (the “Company” or “CSI”) most recent annual financial statements included in its annual report on Form 10-K filed with the SEC on January 13, 2015. Operating results for the six-month period ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending September 30, 2015.

Principles of Consolidation	Principles of Consolidation – The accompanying condensed consolidated financial statements are presented in conformity with US GAAP and include operations and balances of Caspian Services, Inc. and its wholly-owned subsidiaries: Caspian Services Group Limited (“CSGL”), Caspian Services Group LLP (“Caspian LLP”), Caspian Services Group B.V. (“Caspian B.V.”), Caspian Services LLC (“Caspian LLC”), Caspian Geophysics, Ltd (“CGEO”), TatArka LLP (“TatArka”), Caspian Real Estate, Ltd (“CRE”) and Kyran Holdings Limited (“Kyran”); and include majority owned subsidiaries: Balykshi LLP (“Balykshi”) and Mangistau Oblast Boat Yard LLP (“MOBY”), collectively “Caspian” or the “Company.” TatArka owns a 40% non-controlling interest in Veritas-Caspian LLP (“Veritas-Caspian”). Ownership of up to 50% noncontrolling interests are accounted for by the equity method. Intercompany balances and transactions have been eliminated in consolidation.
Business Condition	Business Condition – The Company funded a portion of the construction of its marine base through a combination of debt and equity financing pursuant to which the European Bank for Reconstruction and Development (“EBRD”) provided $18,600 of debt financing. EBRD also made an equity investment in the marine base in the amount of $10,000 in exchange for a 22% equity interest in Balykshi.

	In connection with EBRD’s 22% equity interest in Balykshi, the Company entered into a Put Option Agreement granting EBRD the right to require the Company to repurchase the 22% equity interest based on Balykshi’s fair market value. The put option is exercisable between June 2013 and June 2017. This agreement also contains an acceleration feature that, should a triggering event occur, grants EBRD the right to require the Company to repurchase the $10,000 equity investment at a 20% annual rate of return at any time following the triggering event.

	In accordance with US GAAP the put option is an unconditional obligation and is measured at its fair value based on an estimate of the amount of cash that would be required to settle the liability.

	Under the terms of the EBRD Loan Agreement, as amended, Balykshi is required to repay the loan principal and accrued interest in eight equal semi-annual installments commencing November 20, 2011 and then occurring each May 20 and November 20 thereafter until fully repaid. As of the date of this report, none of the required semi-annual repayment installments have been made. The failure to pay the principal or interest on the EBRD loan when due may constitute an event of default under the EBRD Loan Agreement. The EBRD financing agreements have acceleration right features that, in the event of default, allow EBRD to declare the loans and accrued interest immediately due and payable. As a result, the Company has included the EBRD loan and all accrued interest as current liabilities at March 31, 2015 and September 30, 2014. Additionally, an event of default may trigger the acceleration clause in the Put Option Agreement with EBRD which would allow EBRD to put its $10,000 investment in Balykshi back to the Company. If EBRD were to accelerate its put right, the Company could be obligated to repay the initial investment plus a 20% annual rate of return. The balance of the accelerated put option liability was $22,641 and $21,649 as of March 31, 2015 and September 30, 2014, respectively. This balance includes the 20% rate of return on the $10,000 investment and is classified as a current liability. EBRD also previously notified the Company that it believes the Company and Balykshi are in violation of certain other covenants of the EBRD financing agreements. As of the date of this report, to the Company’s knowledge, EBRD has not sought to accelerate repayment of the loan or the put option.

	The Company continues to engage in discussions with EBRD regarding a possible restructuring of its financial obligations to EBRD.

	To help the Company meet its additional funding obligations to construct the marine base, in 2008 the Company entered into two facility agreements pursuant to which the Company received debt funding of $30,000. In June and July 2011 Mr. Bakhytbek Baiseitov (the “Investor”) acquired the two facility agreements. In connection with restructuring the facility agreements, each of which matured in 2011, in September 2011 the Company issued Investor two secured promissory notes, a Secured Non-Negotiable Promissory Note in the principal amount of $10,800 (“Non-Negotiable Note”) and a Secured Convertible Consolidated Promissory Note in the principal amount of $24,446 (“Consolidated Note”).

	Pursuant to the terms of the Non-Negotiable Note, Investor may, at any time, demand and receive payment of the Note by the issuance of common stock of the Company. The price per share for principal and interest is $0.12. The Investor has the right, at any time, to demand the issuance of shares in satisfaction of the Non-Negotiable Note. In September 2014 the Company and Investor agreed to extend the maturity date of the Non-Negotiable Note from September 30, 2014 to June 30, 2015. If the issuance of common stock has not been demanded by Investor or made at the election of the Company by the June 30, 2015 maturity date, the Company must repay the principal and interest in cash.

	Pursuant to the terms of the Consolidated Note, interest accrues at 12% per annum and shall be paid semi-annually in arrears on each six month anniversary of the Issuance Date (September 30, 2011). The Consolidated Note provides for a default rate of interest of 13% per annum upon the occurrence and during the continuation of an event of default, which shall be payable in cash upon demand. In September 2014 the Company and Investor agreed to extend the maturity date of the Consolidated Note from September 30, 2014 to June 30, 2015. The unpaid principal amount of the Consolidated Note, and any accrued but unpaid interest thereon, is due and payable on June 30, 2015.

	Investor has the right at any time following a five day written notice to convert all or any portion of the principal and any accrued but unpaid interest under the Consolidated Note into common stock at $0.10 per share. Any conversion that would result in a change in control of the Company without the prior consent of EBRD could result in a breach of the EBRD financing agreements.

	As of the date of this report, none of the semi-annual interest payments have been made when due. The Company has, however, made partial interest payments to Investor totaling $2,600 in reduction of interest due as of March 31, 2015.

	The failure to pay interest on the Consolidated Note when due, may be deemed an event of default under the Consolidated Note. In the event of a default that remains uncured, Investor may, at any time, demand immediate repayment of the Consolidated Note. As a result, the Company has included the Consolidated Note and all accrued but unpaid interest as current liabilities at March 31, 2015 and September 30, 2014. As of the date of this report, to the Company’s knowledge, Investor has not demanded immediate repayment of the Consolidated Note.

	In August 2008 MOBY entered into a Loan Agreement (the “MOBY Loan Agreement”) with EBRD. In connection with the loan, EBRD required the Company and others to, among other things, execute a Deed of Guarantee and Indemnity (“Guarantee”), guaranteeing the repayment of the MOBY loan. The guarantee obligation of each party is limited to each party’s respective ownership interest in MOBY.

	The outstanding balance of the MOBY loan was $6,153 and $5,998 as of March 31, 2015 and September 30, 2014, respectively, including accrued and unpaid interest. The interest rate under the MOBY loan is generally the interbank rate plus a margin of 3.6%. The MOBY Loan Agreement provides that during any period when the loan is in default the rate of interest shall be the interbank rate plus a margin of 3.6% plus 2% per annum. The MOBY Loan Agreement provides for 14 equal semi-annual installment payments of principal and interest on June 15 and December 15, commencing on or after August 2011. As of March 31, 2015 and September 30, 2014 MOBY had made no semi-annual installment payments and was in violation of certain financial covenants under the MOBY Loan Agreement. Pursuant to the MOBY Loan Agreement, if an event of default occurs and is continuing, EBRD may, at its option, by notice to MOBY, declare all or any portion of the principal and accrued interest of the loan due and payable on demand, or immediately due and payable without further notice and without presentment, demand or protest.

	To the Company’s knowledge, to date EBRD has taken no action to establish the defaults or to increase or accelerate the debt obligations of MOBY or the guarantee obligation of the Company. Should EBRD determine to take action, the Company would not have sufficient funds to repay its portion of the MOBY loan or the guarantee and would be forced to seek sources of funding to satisfy these obligations.

	Should EBRD or Investor determine to accelerate the Company’s financial obligations to them, the Company currently has insufficient funds to repay its obligations to EBRD or Investor, individually or collectively, and would be forced to seek other sources of funds to satisfy these obligations. Given the Company’s current and near-term anticipated operating results, the difficult credit and equity markets and the Company’s current financial condition, the Company believes it would be very difficult to obtain new funding to satisfy these obligations. If the Company were unable to obtain funding to meet these obligations, EBRD or Investor could seek any legal remedy available to them to obtain repayment, including forcing the Company into bankruptcy, or in the case of the EBRD loan, which is collateralized by the assets, including the marine base, and bank accounts of Balykshi, CRE and MOBY, foreclosure by EBRD on such assets and bank accounts. As of March 31, 2015 the
	book value of collateralized assets was approximately $30,821. The Company has also agreed to collateralize Investor’s Notes with non-marine base related assets. The ability of the Company to continue as a going concern is dependent upon, among other things, its ability to (i) successfully restructure its financial obligations to EBRD and Investor on terms that will allow the Company to service the restructured obligations, (ii) generate sufficient revenue from operations to satisfy its financial obligations, and/or (iii) identify a financing source that will provide the Company the ability to satisfy its financial obligations. Uncertainty as to the outcome of these factors raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company intends to continue its efforts to restructure its financial obligations to EBRD and Investor.
Nature of Operations	Nature of Operations – The Company’s business consists of three major business segments:

	Vessel Operations – Vessel operations consist of chartering a fleet of shallow draft offshore support vessels to customers performing oil and gas exploration activities in the Caspian Sea.

	Geophysical Services – Geophysical services consist of providing seismic data acquisition services to oil and gas companies operating onshore in Kazakhstan.

	Marine Base Services – Marine base services consist of operating a marine base with a boat repair and drydocking services yard located at the Port of Bautino on the North Caspian Sea.

Correction to Previously Issued Financial Statements	Correction to Previously Issued Financial Statements – In the current period, the Company identified mathematical errors in the calculation of basic and diluted loss per share for the three month and the six month periods ending March 31, 2014. This mathematical error was related to the use of the net loss as the numerator. To correct this mathematical error, the Company changed the formula to use the net loss attributable to the Caspian Services as the numerator. The Company has assessed the impact of the mathematical error on each period impacted under the guidance of Accounting Standards Codification Topic 250-10, Accounting Changes and Error Corrections, related to SEC Staff Accounting Bulletin ("SAB") No.99, Materiality, and has determined that the impact of the error was not material to the previously issued unaudited condensed consolidated financial statements. The Company has elected to revise its previously issued unaudited condensed consolidated financial statements to facilitate comparisons across periods. The Company has corrected the basic and diluted loss per share for the three month and the six month periods ending March 31, 2014, as follows:

		For The Three Months			For The Six Months
		Ended March 31, 2014			Ended March 31, 2014
		Previously reported	Revised	Difference	Previously reported	Revised	Difference
	Basic and Diluted Loss per Share	$ (0.21)	$ (0.17)	$ (0.04)	$ (0.22)	$ (0.19)	$ (0.03)

Basic and Diluted Loss Per Share	Basic and Diluted Loss Per Share – Basic loss per common share is calculated by dividing net loss attributable to Caspian Services by the weighted-average number of common shares outstanding. Diluted loss per common share is calculated by dividing net loss attributable to Caspian Services by the weighted-average number of common shares outstanding giving effect to potentially dilutive issuable common shares.

	For the three and six months ended March 31, 2015 the Company had 800,000 options outstanding and 437,555,000 potential shares related to convertible debt that were not included in the computation of diluted loss per common share because they would be anti-dilutive.

	For the three and six months ended March 31, 2014 the Company had 800,000 options outstanding, 147,939 non-vested restricted shares outstanding and 402,913,333 potential shares related to convertible debt that were not included in the computation of diluted loss per common share because they would be anti-dilutive.
Fair Value of Financial Instruments	Fair Value of Financial Instruments – The carrying amounts reported in the accompanying condensed consolidated financial statements for other receivables, accounts receivables from related parties, accounts payable to related parties and accrued expenses approximate fair values because of the immediate nature or short-term maturities of these financial instruments. The carrying amount of long-term debts approximates fair value due to the stated interest rates approximating prevailing market rates.
Accelerated Put Option Liability	Accelerated Put Option Liability – In connection with EBRD’s $10,000 equity investment to purchase a 22% equity interest in Balykshi, the Company entered into a Put Option Agreement granting EBRD the right to require the Company to repurchase the 22% equity interest. The put option is exercisable between June 2013 and June 2017. The put price is determined based on the fair market value of Balykshi as mutually agreed by the parties. If the parties are unable to agree upon a fair market valuation, the parties agree to hire a third party expert to determine the put price on the basis of the fair market value of Balykshi, as set forth in the Put Option Agreement. In the event there is a change in control of the Company, EBRD has the right to require the repurchase of the equity interest at its fair market value. The Put Option Agreement also contains an acceleration feature. Should Balykshi: (i) default on $1,000 or more of debt; (ii) fail to meet the obligations of any of the agreements between Balykshi, the Company and EBRD; (iii) be found to have made false representations to EBRD; or (iv) be declared insolvent, EBRD has the right to accelerate the put option. If the put option is accelerated, EBRD can require the Company to repurchase the $10,000 equity investment plus a 20% per annum rate of return, taking into account any dividend or other distribution received by EBRD, at any time following one of the events mentioned above. Due to the fact that certain events of default under the EBRD Loan Agreement may have occurred and that such could trigger EBRD’s accelerated put right, we have reflected an accelerated put option liability of $22,641, although, as of the date of this quarterly report on Form 10-Q, to the Company’s knowledge, EBRD has not sought to accelerate the put option.
Revenue Recognition	Revenue Recognition – Vessel revenues are usually derived from time charter contracts on a rate-per-day of service basis; therefore, vessel revenues are recognized on a daily basis throughout the contract period. These time charter contracts are generally on a term basis. The base rate of hire for a contract is generally a fixed rate; however, these contracts often include clauses to recover mobilization and demobilization costs and specific additional costs which are billed on a monthly basis.

	Geophysical service revenue is recognized when services are rendered, accepted by the customer and collectability is reasonably assured. Direct costs are charged to each contract as incurred along with allocated indirect costs for the specific period of service. Losses on contracts are recognized during the period in which the loss first becomes probable and reasonably estimated. Due to the nature of some of the geophysical services provided, certain customers have prepaid their contract services. These prepayments have been deferred and are recognized as revenue as the services are provided.

	Marine base service revenue is recognized when services are rendered, accepted by the customer and collectability is reasonably assured.
Receivables	Receivables – In the normal course of business the Company extends credit to its customers on a short-term basis. The principal customers for the Company’s marine vessels are major oil and natural gas exploration, development and production companies and their contractors. Credit risks associated with these customers are considered minimal. Dealings with smaller, local companies pose the greatest risks. For new geophysical services customers the Company typically requires an advance payment and the Company retains the seismic data generated from these services until payment is made in full. The Company routinely reviews accounts receivable balances and makes provisions for doubtful accounts as necessary. Accounts are reviewed on a case-by-case basis and losses are recognized in the period the Company determines it is likely that receivables will not be fully collected. The Company may also provide a general provision for accounts receivable based on existing economic conditions.
Impairment of Long-Lived Assets and Long-Lived Assets for Disposal	Impairment of Long-Lived Assets and Long-Lived Assets for Disposal – Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount that the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
Income Taxes	Income Taxes – Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences in assets and liabilities and their respective tax bases and attributable to operating loss carry forwards. Differences generally result from the calculation of income under accounting principles generally accepted in the United States of America and the calculation of taxable income calculated under Kazakhstan income tax regulations.

	The current regime of penalties and interest related to reported and discovered violations of Kazakhstan’s laws, decrees and related regulations can be severe. Penalties include confiscation of the amounts in question for currency law violations, as well as fines of generally 100% of the unpaid taxes. Interest is assessable at rates of generally 0.06% per day. As a result, penalties and interest can result in amounts that are multiples of any unreported taxes. At March 31, 2015 and 2014 no interest or penalties have been accrued as a result of any tax positions taken. In the event interest or penalties are assessed, the Company will include these amounts related to unrecognized tax benefits in income tax expense.

	A deferred tax liability is not recognized for the following types of temporary differences unless it becomes apparent that those temporary differences will reverse in the foreseeable future:

	(a) An excess of the amount for financial reporting over the tax basis of an investment in a foreign subsidiary or a foreign corporate joint venture, that is essentially permanent in duration; or

	(b) Undistributed earnings of a domestic subsidiary or a domestic corporate joint venture that is essentially permanent in duration.
Dry-docking Costs	Drydocking Costs – The Company’s vessels must be periodically drydocked and undergo certain inspections to maintain their operating classification, as mandated by certain maritime regulations. Costs incurred to drydock the vessels for certification are capitalized and amortized over the period until the next drydocking, which is generally 24 months. Drydocking costs comprise painting the vessels’ hulls and sides, recoating cargo and fuel tanks, and performing other engine and equipment maintenance activities to bring the vessels into compliance with classification standards.
Foreign Currency Transactions	Foreign Currency Transactions – Caspian Services, Inc., the parent company of the subsidiaries, makes its principal investing and financing transactions in United States Dollars (USD), which is also its functional currency. Transactions and balances denominated in other currencies have been translated into USD using historical exchange rates. Exchange gains and losses from holding foreign currencies and having liabilities payable in foreign currencies are included in the results of operations.

	USD is also the functional currency of CSGL, CGEO and CRE.

	The Kazakh Tenge (KZT) is the functional currency of Caspian LLP, TatArka, Balykshi, Kyran and MOBY; the Euro is the functional currency of Caspian B.V. and the Russian Ruble is the functional currency of Caspian LLC. Their respective balance sheets have been translated into USD at the exchange rates prevailing at each balance sheet date. Their respective statements of operations and comprehensive income (loss) have been translated into USD using the average exchange rates prevailing during the periods of each statement. The corresponding translation adjustments are part of accumulated other comprehensive income (loss) and are shown as part of shareholders’ equity.

	The translation of KZT, Euro and Russian Ruble denominated assets and liabilities into USD for the purpose of these condensed consolidated financial statements does not necessarily mean the Company could realize or settle, in USD, the reported values of these assets and liabilities in USD. Likewise it does not mean the Company could return or distribute the reported USD value of its subsidiaries’ capital to its shareholders.
Use of Estimates	Use of Estimates – The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Comprehensive Loss	Comprehensive Loss – Total comprehensive loss consists of net loss and changes in accumulated other comprehensive loss. Accumulated other comprehensive loss is presented in the consolidated statements of comprehensive income (loss) and consists of foreign currency translation adjustments.
Concentration of Revenue	Concentration of Revenue – During the six months ended March 31, 2015 vessel revenue from four customers that together represented approximately 72% of total vessel revenue as follows, Customer A – 22%; Customer B – 20%; Customer C – 18%; and Customer D – 12%.

	During the six months ended March 31, 2015 geophysical service revenue from two customers that together represented approximately 96% of total geophysical revenue as follows, Customer A – 54% and Customer B – 42%.

	During the six months ended March 31, 2015 marine base revenue from three customers represented 75% of total marine base revenue as follows, Customer A – 41%, Customer B – 24%, and Customer C – 10% .
Recent Accounting Pronouncements	Recent Accounting Pronouncements –

	In April 2014 the FASB issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements and Property, Plant, and Equipment. Reporting discontinued operations and disclosures of disposals of components of an entity. The Company does not believe that adoption of the standard will have a material impact on its results of operations or financial position upon adoption.

	In May 2014 the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. The objective of this update is to provide a robust framework for addressing revenue recognition issues and, upon its effective date, replaces almost all existing revenue recognition guidance. This update is effective in annual reporting periods beginning after December 15, 2016 and the interim periods within that year. The Company is evaluating the impact of this update on its financial statements.

	In June 2014 FASB issued Accounting Standards Update No. 2014-12, Compensation - Stock Compensation (Topic 718) – Accounting for Share Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period, be treated as a performance condition. ASU 2014-12 is effective for interim and annual periods beginning after December 15, 2015. The amendments can be applied prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented and to all new or modified awards thereafter. Early adoption is permitted. The adoption of this standard is not expected to have a material effect to the Company’s operating results or financial condition.

	In August 2014 the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern (ASU 2014-15). The guidance in ASU 2014-15 sets forth management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that management's plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s operating results or financial condition.

	The Company has considered all recent accounting pronouncements issued or proposed by the FASB and other standards-setting bodies since the last audit of its financial statements. The Company does not believe that these pronouncements will have a material effect on the Company’s financial statements.

Subsequent Events	Subsequent Events – The Company’s management has evaluated subsequent events through the date the financial statements were issued and has found no subsequent events to report.

NOTE_3_NOTES_PAYABLE_Tables

NOTE 3 - NOTES PAYABLE (Tables)	6 Months Ended
NOTE 3 - NOTES PAYABLE (Tables)	Mar. 31, 2015
Note 3 - Notes Payable Tables
NOTES PAYABLE		March 31,	September 30,
		2015	2014

	Secured non-negotiable promissory note payable to Investor; interest at 0.26%	$ 10,899	$ 10,885
	due June 30, 2015

	Secured convertible consolidated promissory note payable to Investor; interest at 12%	34,673	32,862
	(default interest at 13%) due June 30, 2015

	Balykshi- EBRD loan and accrued interest at 7% plus the interbank rate due May 2015
	(default interest at 9% plus the interbank rate ); secured by property and bank accounts	26,714	25,539

	MOBY- EBRD loan and accrued interest at 3.6% plus the interbank rate due June 2018 (default interest at 5.6% plus the interbank rate )	6,153	5,998


	Total Long-term Debt	78,439	75,284
	Less: Current Portion	(78,439)	(75,284)
	Long-term Debt - Net of Current Portion	$ -	$ -

NOTE_5_RELATED_PARTY_TRANSACTI1

NOTE 5 - RELATED PARTY TRANSACTIONS (Tables)	6 Months Ended
NOTE 5 - RELATED PARTY TRANSACTIONS (Tables)	Mar. 31, 2015
Note 5 - Related Party Transactions Tables
Accounts receivable from related parties	Accounts receivable from related parties as of March 31, 2015 and September 30, 2014 consisted of the following:

	Related Party's Name	Description	31-Mar-15	30-Sep-14

	Sequa Petroleum	Seismic services	$ 456	$ -
	Demeu Energy	Advance given for vehicles delivery	269	275
	Sayat Media	Receivable from agent for marine base services	185	-
	Caspian Geo Consulting	Advance given for equipment delivery	162	165
		Allowance for doubtful accounts	(430)	(440)
	TOTAL		$ 642	$ -
Accounts payable to related parties	Accounts payable to related parties as of March 31, 2015 and September 30, 2014 consisted of the following:

	Related Party's Name	Description	31-Mar-15	30-Sep-14

	Sayat Media	Other services	$ 15	$ 13
	Others	Others	66	63
	TOTAL		$ 81	$ 76
Short-term notes from related parties	Short-term notes from related parties as of March 31, 2015 and September 30, 2014 consisted of the following:

	Related Party's Name	Description	31-Mar-15	30-Sep-14

	Caspian Geo Consulting	Notes Receivable	$ 2,963	$ -
	Sayat Media	Notes Receivable	-	70
	TOTAL		$ 2,963	$ 70

NOTE_6_FAIR_VALUE_MEASUREMENTS1

NOTE 6 - FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
NOTE 6 - FAIR VALUE MEASUREMENTS (Tables)	Mar. 31, 2015
Note 6 - Fair Value Measurements Tables
Schedule of fair value measurements	There were no changes in the valuation techniques during the six months ended March 31, 2015.

			Fair Value Measurements at Reporting Date Using
	Description	31-Mar-15	Level 1	Level 2	Level 3
	Property held for sale	$ 44	$ -	$ -	$ 44
	Put option liability	22,641	-	-	22,641
	Total	$ 22,685	$ -	$ -	$ 22,685


			Fair Value Measurements at Reporting Date Using
		30-Sep-14	Level 1	Level 2	Level 3
	Property held for sale	$ 44	$ -	$ -	$ 44
	Put option liability	21,649	-	-	21,649
	Total	$ 21,693	$ -	$ -	$ 21,693

NOTE_7_SEGMENT_INFORMATION_Tab

NOTE 7 - SEGMENT INFORMATION (Tables)	6 Months Ended
NOTE 7 - SEGMENT INFORMATION (Tables)	Mar. 31, 2015
Note 7 - Segment Information Tables
Operations and assets of reportable business segments schedule	Further information regarding the operations and assets of these reportable business segments follows:



		For the Three Months				For the Six Months
		Ended March 31,				Ended March 31,
		2015		2014		2015		2014
	Capital Expenditures
	Vessel Operations	$ 54		$ 356		$ 178		$ 813
	Geophysical Services	29		686		1,736		2,188
	Marine Base Services	2		-		2		-
	Total segments	85		1,042		1,916		3,001
	Corporate assets	-		1		-		1
	Less intersegment investments	(17)		-		(125)		-
	Total consolidated	$ 68		$ 1,043		$ 1,791		$ 3,002


		For the Three Months				For the Six Months
		Ended March 31,				Ended March 31,
		2015		2014		2015		2014
	Revenues
	Vessel Operations	$ 1,371		$ 809		$ 6,508		$ 6,723
	Geophysical Services	1,094		3,155		2,096		7,268
	Marine Base Services	3,173		866		3,587		3,077
	Total segments	5,638		4,830		12,191		17,068
	Corporate revenue	-		-		-		-
	Less intersegment revenues	(2,973)		(268)		(3,429)		(2,748)
	Total consolidated	$ 2,665		$ 4,562		$ 8,762		$ 14,320

	Depreciation and Amortization
	Vessel Operations	$ (446)		$ (475)		$ (892)		$ (996)
	Geophysical Services	(408)		(284)		(793)		(607)
	Marine Base Services	(382)		(308)		(770)		(674)
	Total segments	(1,236)		(1,067)		(2,455)		(2,277)
	Corporate depreciation and amortization	(1)		-		(1)		-
	Total consolidated	$ (1,237)		$ (1,067)		$ (2,456)		$ (2,277)

	Interest expense
	Vessel Operations	$ -		$ -		$ -		$ -
	Geophysical Services	-		-		-		-
	Marine Base Services	(1,664)		(1,442)		(3,318)		(2,904)
	Total segments	(1,664)		(1,442)		(3,318)		(2,904)
	Corporate interest expense	(571)		(531)		(1,155)		(1,069)
	Total consolidated	$ (2,235)		$ (1,973)		$ (4,473)		$ (3,973)

	Income/(Loss) Before Income Tax
	Vessel Operations	$ (1,400)		$ (1,768)		$ (490)		$ (1,206)
	Geophysical Services	(1,073)		174		(1,766)		1,733
	Marine Base Services	(3,197)		(8,691)		(5,573)		(10,541)
	Total segments	(5,670)		(10,285)		(7,829)		(10,014)
	Corporate loss	(925)		(1,012)		(1,652)		(1,720)
	Total consolidated	$ (6,595)		$ (11,297)		$ (9,481)		$ (11,734)

		For the Three Months				For the Six Months
		Ended March 31,				Ended March 31,
		2015		2014		2015		2014
	Benefit from (Provision for) Income Tax
	Vessel Operations	$ 287		$ 339		$ 156		$ 599
	Geophysical Services	181		1		335		(521)
	Marine Base Services	-		-		-		-
	Total segments	468		340		491		78
	Corporate provision for income tax	(2)		-		(2)		-
	Total consolidated	$ 466		$ 340		$ 489		$ 78

Loss/(Income) attributable to Noncontrolling Interests
Vessel Operations	$ -		$ -		$ -		$ -
Geophysical Services	-		-		-		-
Marine Base Services	130		1,830		649		1,855
Total segments	130		1,830		649		1,855
Corporate noncontrolling interest	-		-		-		-
Total consolidated	$ 130		$ 1,830		$ 649		$ 1,855

Net (Loss)/Income attributable to Caspian Services Inc.
Vessel Operations	$ (1,113)		$ (1,429)		$ (334)		$ (607)
Geophysical Services	(892)		175		(1,431)		1,212
Marine Base Services	(3,067)		(6,861)		(4,924)		(8,686)
Total segments	(5,072)		(8,115)		(6,689)		(8,081)
Corporate loss	(927)		(1,012)		(1,654)		(1,720)
Total consolidated	$ (5,999)		$ (9,127)		$ (8,343)		$ (9,801)

					March 31,		September 30,
Segment Assets					2015		2014
Vessel Operations					$ 17,302		$ 15,219
Geophysical Services					16,632		18,663
Marine Base Services					67,480		73,001
Total segments					101,414		106,883
Corporate assets					700		766
Less intersegment investments					(40,701)		(40,581)
Total consolidated					$ 61,413		$ 67,068

NOTE_1_THE_COMPANY_AND_BASIS_O2

NOTE 1. THE COMPANY AND BASIS OF PRESENTATION (Details) (USD $)	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Basic and Diluted Loss per Share	($0.11)	($0.17)	($0.16)	($0.19)
Previously reported
Basic and Diluted Loss per Share		($0.21)		($0.22)
Revised
Basic and Diluted Loss per Share		($0.17)		($0.19)
Difference
Basic and Diluted Loss per Share		($0.04)		($0.03)

NOTE_3_NOTES_PAYABLE_Details

NOTE 3 - NOTES PAYABLE (Details) (USD $)	Mar. 31, 2015	Sep. 30, 2014
In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
Total Long-term Debt	$78,439	$75,284
Less: Current Portion	-78,439	-75,284
Long-term Debt - Net of Current Portion	0	0
Non Negotiable Promissory Note [Member]
Total Long-term Debt	10,899	10,885
Convertible Consolidated Promissory Note [Member]
Total Long-term Debt	34,673	32,862
Balykshi- EBRD Loan And Accrued Interest [Member]
Total Long-term Debt	26,714	25,539
MOBY- EBRD loan and accrued interest
Total Long-term Debt	$6,153	$5,998

NOTE_5_RELATED_PARTY_TRANSACTI2

NOTE 5 - RELATED PARTY TRANSACTIONS (Details) (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
Accounts receivable from related parties	$642	$0
Sequa Petroleum
Related Party, description	Seismic services
Accounts receivable from related parties	456	0
Demeu Energy [Member]
Related Party, description	Advance given for vehicles delivery
Accounts receivable from related parties	269	275
Sayat Media [Member]
Related Party, description	Receivable from agent for marine base services
Accounts receivable from related parties	185	0
Caspian Geo Consulting [Member]
Related Party, description	Advance given for equipment delivery
Accounts receivable from related parties	162	165
AllowanceForDoubtfulAccounts [Member]
Accounts receivable from related parties	($430)	($440)

NOTE_5_RELATED_PARTY_TRANSACTI3

NOTE 5 - RELATED PARTY TRANSACTIONS (Details 1) (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
Accounts payable to related parties	$81	$76
Sayat Media [Member]
Related Party, description	Other services
Accounts payable to related parties	15	13
Other
Related Party, description	Others
Accounts payable to related parties	$66	$63

Recovered_Sheet1

Note 5 - RELATED PARTY TRANSACTIONS (Details 2) (USD $)	Mar. 31, 2015	Sep. 30, 2014
In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
Short-term notes from related parties	$2,963	$70
Sayat Media [Member]
Short-term notes from related parties	0	70
Caspian Geo Consulting [Member]
Short-term notes from related parties	$2,963	$0

NOTE_5_RELATED_PARTY_TRANSACTI4

NOTE 5 - RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2015
Moby [Member]
Lease revenue	$535	$665
Sayat Media [Member]
Revenue from the agent fee			49	49
Kazmortansflot
Marine base services revenue			$0	$9

NOTE_6_FAIR_VALUE_MEASUREMENTS2

NOTE 6 - FAIR VALUE MEASUREMENTS (Details) (USD $)	Mar. 31, 2015	Sep. 30, 2014
In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
Property held for sale	$44	$44
Put option liability	22,641	21,649
Total	22,685	21,693
Level 1
Property held for sale	0	0
Put option liability	0	0
Total	0	0
Level 2
Property held for sale	0	0
Put option liability	0	0
Total	0	0
Level 3
Property held for sale	44	44
Put option liability	22,641	21,649
Total	$22,685	$21,693

NOTE_7_SEGMENT_INFORMATION_Det

NOTE 7 - SEGMENT INFORMATION (Details) (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Capital Expenditures
Total Segments Capital Expenditures	$85	$1,042	$1,916	$3,001
Corporate assets	0	1	0	1
Less intersegment investments	-17	0	-125	0
Total consolidated	68	1,043	1,791	3,002
Revenues
Total segments Revenues	5,638	4,830	12,191	17,068
Corporate revenue	0	0	0	0
Less intersegment revenues	-2,973	-268	-3,429	-2,748
Total consolidated	2,665	4,562	8,762	14,320
Depreciation and Amortization
Total segments Depreciation and Amortization	-1,236	-1,067	-2,455	-2,277
Corporate depreciation and amortization	-1	0	-1	0
Total consolidated	-1,237	-1,067	-2,456	-2,277
Interest expense
Total segments Interest expense	-1,664	-1,442	-3,318	-2,904
Corporate interest expense	-571	-531	-1,155	-1,069
Total consolidated	-2,235	-1,973	-4,473	-3,973
Income/(Loss) Before Income Tax
Total segments Income/(Loss) Before Income Tax	-5,670	-10,285	-7,829	-10,014
Corporate loss	-925	-1,012	-1,652	-1,720
Total consolidated	-6,595	-11,297	-9,481	-11,734
Benefit from (Provision for) Income Tax
Total segments Benefit from (Provision for) Income Tax	468	340	491	78
Corporate provision for income tax	-2	0	-2	0
Total consolidated	466	340	489	78
Loss/(Income) attributable to Noncontrolling Interests
Total segments Loss/(Income) attributable to Noncontrolling Interests	130	1,830	649	1,855
Corporate noncontrolling interest	0	0	0	0
Total consolidated	130	1,830	649	1,855
Net Loss/(Income) attributable to Caspian Services Inc.
Total segments Net Loss/(Income) attributable to Caspian Services Inc.	-5,072	-8,115	-6,689	-8,081
Corporate loss	-927	-1,012	-1,654	-1,720
Total consolidated	-5,999	-9,127	-8,343	-9,801
Vessel Operations [Member]
Capital Expenditures
Total Segments Capital Expenditures	54	356	178	813
Revenues
Total segments Revenues	1,371	809	6,508	6,723
Depreciation and Amortization
Total segments Depreciation and Amortization	-446	-475	-892	-996
Interest expense
Total segments Interest expense	0	0	0	0
Income/(Loss) Before Income Tax
Total segments Income/(Loss) Before Income Tax	-1,400	-1,768	-490	-1,206
Benefit from (Provision for) Income Tax
Total segments Benefit from (Provision for) Income Tax	287	339	156	599
Loss/(Income) attributable to Noncontrolling Interests
Total segments Loss/(Income) attributable to Noncontrolling Interests	0	0	0	0
Net Loss/(Income) attributable to Caspian Services Inc.
Total segments Net Loss/(Income) attributable to Caspian Services Inc.	-1,113	-1,429	-334	-607
Geophysical Services [Member]
Capital Expenditures
Total Segments Capital Expenditures	29	686	1,736	2,188
Revenues
Total segments Revenues	1,094	3,155	2,096	7,268
Depreciation and Amortization
Total segments Depreciation and Amortization	-408	-284	-793	-607
Interest expense
Total segments Interest expense	0	0	0	0
Income/(Loss) Before Income Tax
Total segments Income/(Loss) Before Income Tax	-1,073	174	-1,766	1,733
Benefit from (Provision for) Income Tax
Total segments Benefit from (Provision for) Income Tax	181	1	335	-521
Loss/(Income) attributable to Noncontrolling Interests
Total segments Loss/(Income) attributable to Noncontrolling Interests	0	0	0	0
Net Loss/(Income) attributable to Caspian Services Inc.
Total segments Net Loss/(Income) attributable to Caspian Services Inc.	-892	175	-1,431	1,212
Marine Base Services [Member]
Capital Expenditures
Total Segments Capital Expenditures	2	0	2	0
Revenues
Total segments Revenues	3,173	866	3,587	3,077
Depreciation and Amortization
Total segments Depreciation and Amortization	-382	-308	-770	-674
Interest expense
Total segments Interest expense	-1,664	-1,442	-3,318	-2,904
Income/(Loss) Before Income Tax
Total segments Income/(Loss) Before Income Tax	-3,197	-8,691	-5,573	-10,541
Benefit from (Provision for) Income Tax
Total segments Benefit from (Provision for) Income Tax	0	0	0	0
Loss/(Income) attributable to Noncontrolling Interests
Total segments Loss/(Income) attributable to Noncontrolling Interests	130	1,830	649	1,855
Net Loss/(Income) attributable to Caspian Services Inc.
Total segments Net Loss/(Income) attributable to Caspian Services Inc.	($3,067)	($6,861)	($4,924)	($8,686)

NOTE_7_SEGMENT_INFORMATION_Det1

NOTE 7 - SEGMENT INFORMATION (Details 1) (USD $)	Mar. 31, 2015	Sep. 30, 2014
In Thousands, unless otherwise specified	Mar. 31, 2015	Sep. 30, 2014
Total segments Assets	$101,414	$106,883
Corporate assets	700	766
Less intersegment investments	-40,701	-40,581
Total consolidated	61,413	67,068
Vessel Operations [Member]
Total segments Assets	17,302	15,219
Geophysical Services [Member]
Total segments Assets	16,632	18,663
Marine Base Services [Member]
Total segments Assets	$67,480	$73,001